The New Home Co. Inc., one of the most active builders on the Irvine Ranch and other area master-planned communities owned by Orange County’s largest landowners, is turning the tables for a new project it has in the works just over the Riverside County line in Corona.
The Aliso Viejo-based homebuilder has begun to unveil plans for a 275-acre residential project it has in the works in the Inland Empire city, where it’s acting as master developer.
Plans call for the Bedford project to hold more than 1,600 homes when it’s built out over the next decade.
An official groundbreaking for a 400-home first phase was held last week. About 400 homes in a mix of styles ranging from attached townhomes to larger single-family houses will open for sales in about a year.
Tentative prices are a little more than $400,000 for smaller units and more than $800,000 for larger homes in the first phase.
New Home Co. plans to build some of the homes itself but will sell some in the first phase to other builders it will pick this year.
About 20 largely Orange County-based firms, plus those with existing operations in the Inland Empire, have been involved in introductory meetings on potential lot sales at the gated community, according to New Home Co. Chief Executive Larry Webb.
Acting as a master developer is a switch for the company. It’s done most of its business in Southern California by buying land from other master developers, in particular Newport Beach-based Irvine Company, and developing housing projects on those companies’ land, or by acting as a fee builder for Irvine Co.
New Home Co. is OC’s 35th largest public company on the Business Journal’s latest ranking (see related stories, this page and pages 3 to 5), with a market value of about $220 million. It’s also acted as a master developer on land it owns near Sacramento and at the 169-home Lambert Ranch community in Irvine, but not on a project nearly as large as Bedford.
“It’s safe to say that this is will be the most we’ve ever spent on a project in our career,” said Webb, who before starting the company in 2009 headed Irvine-based John Laing Homes, which had been one of the country’s largest private builders.
$74M Land Buy
New Home Co. bought the Corona development site, which was previously called Arantine Hills, in 2014 in a joint venture with Toronto-based Tricon Capital Group Inc.
Tricon, also a large shareholder in New Home Co., provided the majority of the upfront funds for the venture, regulatory filings show.
The Tricon-New Home Co. partnership has committed to invest about $120 million in the project, according to regulatory filings dated around the time of the land buy. The land itself cost nearly $74 million, or roughly $270,000 per acre.
The builder hasn’t disclosed how much it plans to spend to build the project, which it describes as the first master-planned community in the city in more than 15 years.
The land is near the intersection of the Corona (15) Freeway and Cajalco Road next to the Eagle Glen master-planned community in south Corona. It’s about 30 miles from John Wayne Airport.
New Home Co. has already done extensive grading and other early-stage infrastructure work there over the past six months, according to John Sherwood, New Home Co. vice president of community development, who’s been overseeing the project.
A new intersection connecting the development to the 15 Freeway is a multimillion-dollar endeavor being funded by the builder, he said.
Construction under way on the heavily congested 15 and Riverside (91) freeways near the project should be completed around the time of Bedford’s opening, easing some traffic issues in the area, Webb said.
Traffic concerns and affordability are key issues for potential buyers in the Inland Empire, where there’s been limited home construction since the recession, Webb said. More than 30,000 homes were built and sold there each year during the last building boom, or more than twice what’s being sold in the region now, he said.
“There’s a pent-up demand” for new housing in the area and for California as a whole, according to Webb. “We’re not overbuilding.”
“The resale market has solidified” over about the past year in the area around Corona in particular, he said. The builder originally targeted a 2016 opening when it acquired the land but postponed it until the area’s housing market improved and the city signed off on updated development plans.
It’s anticipating that buyers at Bedford will come from three main demographics: entry-level, first-time, move-up buyers, and empty-nesters wanting smaller homes.
Webb said he was unsure which of the five distinct product types in the first phase will be built by New Home Co. or by other builders that buy lots from the Tricon-New Home joint venture. Lot sales won’t necessarily go to the highest bidder, he said.
The development “is going to be a very special place, a community unlike any other in the Inland Empire.”
“We have extremely high expectations to deliver one of the region’s premier communities,” Webb said. “With that in mind, we will be very thorough in our approach to selecting our homebuilder partners.”
Bedford was initially designed to hold nearly 70 acres of commercial space, but that’s been scaled back to about 10 acres due to congestion concerns, and it will hold a retail development designed to serve local residents, the builder said.
Webb said an unnamed retail developer is in escrow to buy that land and that the deal should close soon.
